The MSME sector wants Finance Minister Nirmala Sitharaman to come out with a special package for small and medium enterprises to ensure greater availability of institutional credit at competitive rates to enable it to play a bigger role as India moves closer to becoming a USD 5 trillion economy. Sitharaman is scheduled to present the interim budget 2023–24 in the Lok Sabha on February 1. This will be the last major economic document of the government before the next general elections.
The Union Budget 2024-2025 is expected to have a significant impact on the MSME sector. According to a PTI report, the MSME sector accounted for 29.15% of the country's gross domestic product (GDP) in the fiscal year 2021–22.
Expectations include addressing the uneven power dynamic between banks and MSMEs, where the balance often favors lenders, according to the Federation of Indian Micro and Small & Medium Enterprises (FISME).
The industry stakeholders are anticipating policies that further incentivise innovation and sustainable growth in sector, which is also the focus area of the government today. Key expectations include supportive measures to pave the way for long-term prosperity and global competitiveness, Samit Garg, MD, E-Factor Experiences, said.
Besides, enhanced support for infrastructure advancements, more accessible financing options for small and medium enterprises, and tax reliefs can stimulate industry growth. "Additionally, recognising the significant role of events in tourism, the industry looks forward to initiatives that strengthen this synergy and economy," Samit said.
Notably, MSMEs are hailed as the growth engines of the Indian ecosystem. The evolution of MSMEs can be credited to technological advancements that surged to cater to dynamic consumer preferences, global trends, and variable market conditions.
"Adoption of technology is crucial for MSMEs to aid critical and informed decision-making. Technology can help MSMEs gather and analyse data, encourage efficient resource allocation, boost operational efficiency, and maximise returns," Delphin Varghese, co-founder, AdCounty Media, said, adding that the expectation from the government is to allocate funds to MSMEs in a bid to foster technological developments and infrastructural support.
Stakeholders also expect budgets to support the implementation of the ONDC initiative, which can allow access to multiple e-commerce platforms without any entry barriers and benefit from the standardization of data and processes.
Also, artificial intelligence (AI) has the potential to emerge as a transformative force for MSMEs. Hariom Seth, founder of Tagglabs, said, "The integration of AI in e-commerce platforms can propel MSME growth, boosting profits and sales for a sustainable future."
"Measures to promote e-commerce among MSMEs, such as simplifying the regulatory framework, providing tax benefits, and creating infrastructure for logistics and digital payments, will be welcome. This would help MSMEs reach a wider customer base, reduce operational costs, and enhance the customer experience," Zameer Malik, CEO of Kulsum's Kaya Kalp, said.
The MSME accounts for 48 per cent of the country's overall exports and employs over 11 crore people. The budget presents an opportunity to address the unique challenges and harness the potential of MSMEs.
Also read | Watch: Finance Minister Nirmala Sitharaman participates in halwa ceremony ahead of Budget 2024
Latest Business News
